The Human Development Index (HDI) is an indicator system which was developed to shift the focus of development economics from national income accounting to people centered policies. Its purpose is to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country, not economic growth alone. The HDI is annually published in the Human Development Report (HDR) by the United Nation Development Programme (UNDP). The HDI was initiated in 1990 using the work on capabilities and functionings by Amartya Sen. From this perspective, people and their capacities should be the ultimate criteria for accessing the development of a country, rather than economic performance.
Measurement
The HDI is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living. The health dimension is assessed by life expectancy at birth, calculated using a minimum value of 20 years and maximum value of 85 years. The education dimension is measured by mean of years of schooling for adults aged 25 years, and expected years of schooling for children of school entering age. The standard of living dimension is measured by gross national income per capita. The minimum value for GNI per capita is set at $100 the maximum is $75,000. Formulating the minimum it was assumed that a considerable amount of unmeasured subsistence and nonmarket production are available in economies close to the minimum that is not captured in official data.
The scores for the three HDI dimension indices are then aggregated into a composite index.
Criticisms
The Human Development Index has been criticized on a number of grounds, for example
- the failure to include any ecological considerations,
- the exclusive focus on national comparison,
- the annual relative ranking which hinders inter-temporal comparisons, because the HDI for a country in a given year depends on the performance of other countries in that year.
- the quality of the underlying data and formula changes by the UNDP
The Human Development Report Office recognized some of the criticisms and undertook a systematic revision of the methods used for the calculation of the HDI. The HDRO also maintains that a fuller picture of a country’s level of human development requires analysis of other indicators and information presented in the statistical annex of the report.
From a perspective of environmental justice it would be of high relevance to incorporate sustainability concerns into the index. So far, the HDI has neglected links to sustainability by failing to investigate impacts on natural system of activities that potentially contribute to national income – and hence to the HDI. The question that needs to be asked is at what cost is human development taking place. For example, the distribution of environmental performance of countries varies greatly – countries such as Brazil and Indonesia have improved their performance on the HDI in part by converting their natural capital to income. While the human development achievements of these countries may seem impressive, it is rather questionable whether they are really sustainable.
For further reading
Neumayer, E. (2001). The human development index and sustainability – a constructive proposal. Ecological Economics, 39(1): 101-114.
Sagar, A. D., & Najam, A. (1998) The human development index: a critical review. Ecological economics, 25(3): 249-264.
Useful websites
This glossary entry is based on a contribution by Sylvia Lorek.
EJOLT glossary editors: Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos.
